Category: Federal Retirement NEWS

Federal Retirement NEWS

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Retirement Income Tax: Five Tips to Reduce How Much You Pay

Retirement Income Tax: Quick Tips

As Tax Day is rushing up, it can be challenging to understand how to deal with retirement income tax. If you aren’t working, it may seem that you would be in the clear. However, between paying taxes on your TSP, cashing out your other investments, and any possible small jobs you may take on during your retirement years, it can pay to make sure that your taxes are as minimal as possible, primarily because of your limited funds during your retirement years.

Build yourself a good nest egg to pay for retirement income tax

Contribute Fully to the TSP

The most important part, of course, is participating in your company-sponsored retirement plan. For federal employees, this will be your TSP. Make sure that you are saving the maximum 5% up to retirement, as the government offers a match that means you effectively double your TSP just by saving money you will spend anyway.

Consider Some Types of Life Insurance

Whole life insurance policies can be a useful means of possibly gaining tax-free income during retirement. Often, there is the possibility, as with indexed life insurance policies, that the policy accumulates a cash benefit connected to the market that means that you could go throughout retirement without having to pay any life insurance premiums or withdraw the money and spend it freely. You can simply avoid retirement income tax as much as possible by saving it instead.

Look Into Tax Deductions for Business

Sometimes, if you supplement your retirement income with part-time self-employment, there are some business expenses and deductions you could include on your tax return. Consult with a financial professional before you make any significant decisions about your career or business, as there is a possibility that the profit you make might not be worth the investment. It is your retirement, after all- if the work you already do doesn’t appeal, consider trying a more low-investment job that could be an enjoyable source of income.

Examine Your Personal Debt

If you have auto or other personal debt, consider consolidation into a lower rate of interest. Unfortunately, rolling it into a home equity loan to deduct the interest is no longer practical since the Tax Cut and Jobs Act passed into effect. Once again, the best solution for this is to discuss your options with a financial professional to be sure that you are getting the best financial solution possible.

Pack your Bags and Move Away

Ever wonder why so many retirees move to Florida? The reason is simple; there’s no state income tax, which can eliminate a massive financial load. In some states, the income tax rates can be as high as 9.90%.

All in all, there is no one right way to retire, but at least with these strategies, retirement income tax may be a little more navigable. To learn more about your options for retirement, go to and talk to a financial expert.


Pet Life Insurance: It’s Real and You Might Want It

Black Dog and Pet Life Insurance
You’ve covered your family, but is your pet covered?

In a dog-eat-dog world, sometimes we forget what will happen to our furred friends. Over 68% of US households, in fact, own pets, and a surprising amount of those households are making financial plans regarding their pets. After all, in the same way, you want your family or beneficiaries to have a good life when you pass away, it is important to make sure that your pet will also be safe from being potentially abandoned. That’s where pet life insurance comes in.

The most famous case of estate planning for pets is the case of Leona Helmsley’s dog Trouble, the ‘Richest pet on Earth.’ Helmsley, an infamous billionaire who cut two grandsons out of her will, bequeathed a sum of two million dollars to her Maltese when she passed away in 2007. The dog passed away four years later, in 2011.

Though you may not be in the position to leave 12 million dollars behind for your dog, or cat, or goldfish for that matter, it is still sometimes a good idea to plan for your pets’ well-being. Before you purchase pet life insurance, though, you must check a few things:

  • If you have nobody to care for them. If someone is there to care for your pets, then there is no need to make special allowances for them.
  •  Make sure that you describe the pet to such a degree that it is not possible to commit fraud by replacing them with a similar animal.
  • Determine your Caretaker: make sure to determine both a trustee and a caretaker; the trustee will make sure that the money is properly used by the caretaker for your pet.
  • Provide for remaining funds: when your pet passes away, the fund may still have some remaining money. Be careful, though- stray away from making an individual the beneficiary, in case they choose to ‘accelerate’ the payout. Instead, choose a charity or cause where you will donate your money.

A recent survey indicated that 44 percent of pet owners have a financial plan to make sure their pets are covered. Some have verbal plans; others have written plans. Pet care, as a rule, is costly and complex, so make sure that you have covered every base. Find out how much it costs you on a monthly basis to feed and provide necessities to your pet, and use that as a basis to understand how much you must leave behind.

Be sure to talk to your financial advisor before you make any financial decisions regarding your pets and pet life insurance. In addition, when you draft your formal trust or will, consult your legal professional to make sure that you have covered all the necessary bases.

Do your Finances Need a Checkup?

Financial Health and You

When is the last time you went to the doctor for a checkup? You probably went at least once last year, and maybe you’ve gone sometime this year, as well. It’s important to have regular checkups; whether it’s your body, your car, or your family. Unfortunately, there is another vital check-up that most federal employees can’t remember doing: a financial checkup. Your financial health is one of the most vital parts of your life, and you should take every chance to check these nine things.

Image of a car's engine as a metaphor for financial health

1)  Are you taking full advantage of your TSP?

Federal employees can take advantage of retirement savings plans like the Thrift Savings Plan, which offers several excellent benefits, such as a match in contributions up to a certain percentage and the ability to invest in a wide variety of funds with more or less conservative growth and risk.

2)  Are you investing in the TSP appropriately?

Before you invest entirely in the TSP, make sure you fully understand the best way to invest to get the most out of your agency’s contribution matches. Be sure to talk to a TSP expert before you make any vital decision.

3)  Are you Missing Out on Better Federal Employees Health Benefit Opportunities?

Whenever you make a significant life change, you should check to see if there is anything that could change about your FEHB. Whether it’s retirement, a new child, or marriage, there is a chance that you could be getting a better rate. Be sure to take advantage of this year’sFEHB open season to learn how you could save your money.

4)  Are you ignoring the alternatives?

FEGLI is not the only life insurance provider on the market. Make sure that you are looking for better life insurance deals before you commit to FEGLI since your financial health could be at stake.

5)  Are you overestimating your H3?

Your H3, your three highest-income years before retirement, may be subject to change in the coming years if you are looking to get a raise in the years to come. Be sure that you have a reasonable understanding of how your finances will change in the future.

6)  Are you likely to miss out on creditable service time?

In calculating your retirement annuity, service time is one of the most critical aspects of how much you will earn on your investments. Be sure all your working time can accumulate service credit.

7)  Are you overestimating your Social Security benefits?

Social Security can be an intricate process to understand without the help of a professional. It’s based on a complicated formula that is subject to adjustment based on wage growth, so it is too easy to overestimate how much you will be receiving.

8)  Do you want the Survivor Benefit?

If you are married, you should make a decision now regarding how you want to handle your survivor’s benefit. Do you want a full benefit, partial benefit, or to reject the survivor annuity wholesale and put the money into alternative investments?

9)  Are your beneficiary designations up to date?

Make sure you know who your money is going to- it saves time and avoids complications when it comes to redeeming claims.

Use these 9 tips next time you talk to your financial advisor and make sure your financial health is acceptable for your future.

TSP Expands Maximum Contribution

new update

Did you save the maximum of $18,000 in your TSP last year? If you did, you might be interested to hear that the maximum for 2018 added $500 more to the ceiling, an excellent option for those who want to lower their taxable income. This option will create a tax-sheltered account that will grow and compound over the years until you withdraw it, at which point it will be taxed as income. However, this is not the only option- there is now the alternative of making after-tax Roth contributions. This offers no tax delay for the present, but down the road when you withdraw the money, you will not have to pay taxes on it. Note that to have this take effect, you must have contributed for at least five years as be at least fifty-nine and a half.

Some Basics of the TSP

The Thrift Savings Plan has several options, all of which have varying degrees of security and flexibility. The C fund holds large-company stocks, the S fund holds small company stocks, the F funds is made up of bonds, and the G fund invests in securities. L funds are a similar concept to target-date funds in normal 401(k) accounts; they invest in the other five, but as you get closer to your end goal they cool off to a low-risk, conservative portfolio. If your retirement is far off and you can stand some fluctuation, the C fund tracks the S&P 500. The risk of losing some of your investment is much higher than the other TSP options, but the potential returns are the highest possible.

Importantly, save at least five percent of your annual income. The government will contribute a total of 4% for your five, and if it is under the maximum, you can still participate in the added interest accumulation. If you are over 50, you may be able to contribute even more to your TSP, bringing the possible total to $24,500. That’s over twenty-four thousand dollars per year that you could be gaining interest on- not a bad quantity for a safe and sane retirement.

Federal Employee Bonuses: Is Transparency Important?

The current state of affairs in Federal employment may be changing soon. President Trump has proposed that changing the system of salaries to a capped total and awarding bonuses based on merit. Many see this as a reasonable proposal, but there is one flaw: While the public can see the salaries most Federal employees are paid, they cannot see bonuses. This is a problem that is compounded by previous precedents set by Federal employers.


In 2016, the government gave 1 million bonuses for performance. This amounts to $1.1 billion, all of which is paid by taxpayers. The challenge that arises is that all this money was kept out of the public eye, due to a lack of governmental transparency that makes it very difficult to glean any information.

Just a couple of months ago, a Treasury Department supervisor revealed $ 1.7 million in bonuses that were given to 2,000 IRS employees. These same employees had delinquencies, access to tax return details which was not authorized and even were accused of sexual misconduct.


The federal government currently gives five different types of bonuses. They include;


  1. Performance bonus


  1. Incentive bonus


  1. Recruitment bonus


  1. Relocation bonus


  1. Retention bonus


Every bonus is supposed to be subject to the Freedom of Information Act disclosure laws, but in the budgetary year 2016, the Office of Personnel Management revealed only 330,000 bonuses which amount to $351 million.


After auditing, the big, small departments and the independent agencies interfere with the system for their benefits.  Most of the government unions which are not transparent claim that the performance awards are a percentage of every employee’s annual salary and it varies depending on the performance rating. They claim if there were a reveal of the percentage used, the taxpayers would know the employee’s ratings.


However, is that a problem with the taxpayer? It should be the management’s problem. Knowing the employee ratings cannot be compared to a taxpayer’s right to know how the money they pay is being used. After all, we already know that the federal bureaucrats offer themselves performance ratings which then increase the bonus and pay levels. An audit done in 2013 showed that 99% of federal workers get successful job performance ratings, which is of course, a near impossibility.


In cessation, a majority of federal workers recognize their performance correctly. This is why most of them are persuaded to fund these performance bonuses which are over a million. This equals to $1.2 billion. However, the taxpayers cannot put into measurement whatever it is they cannot see. These bonuses could be deserved, could be not. Nevertheless, it is the taxpayer’s money being used, so they should be explained to everything. This will help them to decide on how to hold the officials they elected accountable.

More Retired Fed Employees in 2017, but Still No ‘Tsunami’

Efficient retirement strategies with Business Investment Advisors

The so-called “retirement tsunami” has been a federal workforce expert’s clarion, dooming call- the idea that as Baby Boomers age out of the workforce and retire, there will be a massive exodus of employees, replaced by an inexperienced workforce with big shoes to fill. Such an event would leave most federal agencies without the much-needed instructional talent and knowledge. The increased calls for severe reforms in the federal retirement system, the impending budget cuts, and the uncertainty surrounding presidential transition were some of the signs that prompted experts to predict this ‘tsunami.’


According to a study that was conducted in 2014 by the Government Accountability Office, over 31% of federal employees were expected to retire in 2017. Also, the Office of Personnel Management data revealed that the number of federal employees that are 50 years and above constitutes 45% of the total federal workforce. However, contrary to this data, the 2017 employee evacuation never came to pass.


These reasons, interestingly, were not often factors in retirement- most employees that were interviewed claimed that they retired as a result of personal reasons. Only a small percentage of federal employees that retired in 2017 cited buyouts, low confidence, and budget cuts as their primary reasons for retirement. The recent OPM data revealed that the number of federal employees that were eligible for retirement was 93, 713 while the 2017 figure was 95,923.


However, these figures are low as compared to the number of federal employees that filed for retirement in previous years. Between 2011-2014, it is interesting to know that the figures were more than 100,000 in each year. However, some workforce experts insist that the country is yet to experience the expected “retirement tsunami.”  The fact that the majority of the workforce is getting older justifies the current concerns. Although a significant number of employees are applying for retirement, the number is not as high as was earlier expected.


Why Employees left in 2017


Eligibility was the main reason why over 96,000 federal employees left federal services in 2017. However, other reasons such leadership changes at various agencies and buyouts were also some of the reasons for retirement in 2017. Also, other federal employees retire as result of financial reasons.  For instance, one retiree that was interviewed claimed that his goal before retiring was to eliminate his debt. Finally, changes in the work environment independent of any larger impetus also made some federal employees leave federal service.

Are Your Savings Right for Retirement?

Mand and woman discuss retirement with their financial consultant

What are you doing to save for retirement? It’s probably not enough.

There are a variety of reasons you probably aren’t saving enough, but are they good enough to excuse causing yourself more hassle and pain down the road? According to a 2018 retirement savings survey, about 42% of Americans will retire without sufficient savings- not even $10,000. Women also lag behind men in retirement by as much as 5%, but it is still an improvement over past years- in 2016 63 percent of women had less than $10,000 saved, with a large section having saved nothing at all.

So what are the reasons for all of this poor financial planning? There are a few excuses, but the primary one is that you don’t make enough money to be able to afford to set some aside. However, one consideration is that when your money is saved in a tax-deferred account, like the cash value of an indexed life insurance policy or IRA, you are not paying income tax on that segment of your income, which can have the exciting result of reducing your paycheck by less than what you contribute to the fund. It may sound odd, but when you think about it, it makes sense- after all, if your income were, say, 10,000 dollars a year, and you contributed 1,00 of those dollars to the fund a month, assuming a 25% tax rate, your final paycheck would only be reduced by $75, but your account would grow by $100. Attach this to a good market with reasonable growth, and you would be in a vastly more comfortable position with, all things considered, a negligible charge per month.

However, if you are drowning in debt, whether it is a mortgage, credit card bill, or another loan, it should always be an essential priority to pay off these loans. But at the same time, there is no more significant loan than the one you’re paying to your future self- after all, if your debts are all paid but you have nothing to live on, your retirement will be a disappointment, and you will have nothing to fall back on in the case of a medical, family or another financial emergency.

Of course, everyone’s case is different, and not everyone can make these sometimes difficult decisions without the help of an expert. Talk to a retirement professional today and make sure that you know what you need to do to ensure you are financially ready for retirement.

Study Finds Telecommuting Makes Job Satisfaction Take Off

Work-life balance is very important to Federal employeesDo you telecommute or telework? It may make your job satisfaction skyrocket.

In a new federal employee study by the Office of Personnel Management, participation in teleworking or other agency-run wellness programs perform heavily more favorably on performance reviews than those who do not. More than 72% of employees talking about the program said that the program not only made their performance better, it also vastly improved their morale and intent to stay with their current agency, no small feat in an atmosphere with cripplingly low federal employee confidence and security in their jobs in light of recent government shutdowns.

Nevertheless, there is still hope. The study indicated that the reaction to the increased work-life balance offered by telecommuting was overwhelmingly positive, with nearly 80% of all employees saying that they were happier with their more flexible schedule. The reaction to other wellness programs was more lukewarm- only 38% said that they were happy with health and wellness programs.

Less than half of all federal employees think that their managers approve of the use of work-life programs, and in many cases, they aren’t wrong. For instance, the Department of Agriculture changed its telework policy, requiring its employees to be physically present four days a week. Considering the results of the study, it would seem that the Department of Agriculture would want to instead increase options for federal employees to work from a distance. However, for the most part it seems that federal employees would be highly interested in, and remain invested in, a program that would allow increased flexibility in their working hours.

Ultimately, the idea of a work-life balance is a distinctly Millennial concept, and with a changing work culture and a significant Millennial disinterest in public sector work, there is a sort of ‘change or die’ impetus to make these changes. Over decades, the public sector has been stagnant, using outdated technology and work methods, and younger generations are taking note. It isn’t just a question of Millennials, either, as even to the relatively technically up-to-date Generation X represents the largest percentage of federal workers today. Without updating the essential processes that this country runs on, there is no chance that it will be sustainable.

Federal employees are quickly moving towards the generational change that implies a movement towards more modern demographics, and a massive leap forward in making that happen would be to implement these key work-life programs. It remains to be seen where this can go, but for now it will be something to keep an eye on in the future.

Divorce for Federal Employees: What to Do

Federal benefits can be affected in a significant way by major events in life such as the birth of a child or marriage. In fact, instances of divorce can lead to a lot of complications when it comes to claiming federal benefits. The following are some useful tips for divorced or separated federal employees.


FEHB Benefits for Separated Federal Employees


Your spouse will still be eligible for coverage if you are in the process of annulling your marriage or when you are not legally separated. It is important to remember that this only happens when your FEHB enrollment includes the self and family option or the self-plus-one option.


Former Spouse Benefits after Divorce


The FEHB coverage for a former spouse ends when the divorce process has been finalized. In fact, it ends the same day at midnight.  In this case, even a court order cannot stop this law from being implemented. However, the spouse equity act allows your former spouse to continue funding the coverage in his or her private capacity after your divorce has been finalized. A former spouse can convert to an individual policy or choose temporary continuation.


Your FEHB Benefits


After your marriage has been annulled, the FEHB plan has the self and family option that allows you to replace your spouse with other eligible family members. However, you can change your FEHB plan to the self-plus-one option in instances where there is only one family member that is eligible for coverage.


Also, one can change to the self-only option when there is no other eligible person for coverage under your plan. You must complete the Standard Form 2809 to make any changes when it comes to coverage.


 FEGLI Designation of Beneficiary


Federal employees designate a beneficiary when they sign up for the Federal Employees’ Group Life Insurance. The designated person receives the FEGLI proceeds when you die, and most married people designate their spouses.


However, a married person that ends up getting a divorce can change the beneficiary. The fact that you are no longer married means that you have to make the necessary changes by completing a Standard Form 2823 that is available at


Survivor Annuity


At the end of a divorce process, one is no longer required to provide a survivor annuity. However, they must report divorce or annulment to their respective federal agency for this to happen. Retired federal workers must inform OPM when they get a divorce.



Life Insurance: Kid-Tested, Mother-Approved?

Life insurance companies have a new, unconventional sales strategy: selling life insurance policies on children.

The fact that most life insurance companies are asking parents to purchase life insurance for their children can seem to be incongruous, almost like buying your three-year-old a car with the idea that it will be cheaper when they are older. The idea seems absurd, but life insurance companies have recently strongly favored these sales strategies.


The most interesting thing is that insurance companies do not directly say that they are urging parents to purchase life insurance for children. Instead, the companies have coined some enticing phrases, such as “college plans,” “grow up plans,” or “get started plans.” Such pitching terms end up confusing parents and grandparents to fall into their trap, playing on their emotions to get an easy sell.


Realistically, children do not need life insurance and these companies are only interested in making easy profits. They just want to take advantage of the fact that parents and grandparents love their children and can fall for any plan that appears to benefit their kids. There is no problem with selling life insurance to adults as it is a wonderful retirement plan but extending the same to children amount to conmanship.


Life Insurance should retain its Original Purpose.


Life insurance companies should stick to the plan’s original purpose, as it is an excellent long-term financial plan. Purchasing a life insurance plan ensures that your family or dependents are fully protected from economic loss when you die. It is true that a person’s young family benefits from life insurance as it gives them the much-needed financial security.


On the other hand, a family is less likely to suffer any considerable economic loss after an unfortunate death of a child. The death of a child leads to an emotional loss, but the issue of financial loss, which is the main incentive behind the purchase of life insurance, is tough to justify.


Life insurance companies understand that they cannot sell life insurance for children by focusing on economic benefits, which is why the pitch is a more indirect approach to take advantage of the parent of children. The fact remains that these  “grow up plans” are nothing but life insurance for people who do not need, or even really want, coverage.


According to life insurance companies, there is a possibility that some children may not qualify for life insurance when they become adults, and it is a good idea to take advantage of the cheap rates. However, the fact is that until middle age, life insurance will remain relatively cheap in the vast majority of cases.

Retirement Savings Mistakes that can Cost you Greatly

Saving for retirement is an uphill task for most people, but knowingly or unknowingly, you can make this already challenging task a costly mistake. This article will highlight some of the common errors that can cost you your retirement savings, and show you the best way to stretch a dollar to its limits.


It is advisable to pay special attention to retirement savings plan to guarantee yourself some financial security during retirement. Having worked hard for many years, your golden or retirement years should be as enjoyable as possible, but if not handled with caution and good planning, this period can turn to out to be a nightmare. It is possible to control most retirement planning mistakes if you are just willing to listen to some advice.


To begin with, it is always advisable to use a retirement calculator when planning for your retirement. If you have not been using a calculator, it is time for you to reconsider your strategy. A retirement calculator helps you set your retirement on the right path by assisting you to estimate or predict benefits or possible earnings.


To use a retirement calculator, you only need to input your expected time of retirement and what you make to predict your financial position during retirement. Take a step in the right direction by establishing a foundation of good sense and understanding of your potential financial position. It is always important to know your position as time goes by to avoid surprises when you eventually stop work.


Secondly, look out for your employer’s 401k match and take full advantage. In fact, when looking for free money, you can find it through your employer’s 401k match- they will sometimes match up to 5 or 6% of your contributions.


Thirdly, most people lose a lot of money in what referred to as “record keeping” fees, and it is time you also gave the issue serious consideration. Some retirement plans refer to the fees as “account maintenance” fees, and you will just continue losing your savings if you do not make the necessary changes.


According to industry experts, a 1.5% account maintenance fee is reasonable, but some companies charge up to 4% of your savings. This is complete exploitation as it is a significant amount of money. You should look out for a retirement plan that has acceptable “record-keeping” fees to reclaim your savings.


Finally, it is essential to monitor your account on a regular basis to reset your goals or know your current position. Taking years before checking your account is a huge mistake.

Finding The Right Financial Advisor for You

Finding a financial advisor that’s right for you is just like finding any other professional, like a tailor or a barber. Of course, if you pick the wrong barber, you wear a hat for a few weeks. Pick the wrong financial advisor, and the situation becomes dire.

Most people find it hard to openly talk about their financial needs, which is why it is crucial to identify a financial advisor you can fully trust. For your interactions with your financial advisor to be productive, you must feel absolutely comfortable. The right financial advisor should be able to match your specific financial needs regarding experience and knowledge. The following are some useful tips on how to find the right financial advisor;


Get Recommendations


You can get useful recommendations from co-workers, friends, or family when looking for a financial advisor. You can find out about the professional they trust with their financial needs and ask them why they believe the professional. Other useful sources of recommendation include;

  • Brokerage firms
  • Online customer reviews
  • Internet listings
  • Your bank
  • Your attorney or tax planner


Interview the Candidates


You can only find an investment professional that is right for you by talking to several candidates. You should ask relevant questions and also be ready to respond to their questions. A prospective financial advisor may ask you about your;

  • Level of investment risk
  • Long-term healthcare plans
  • Retirement plans
  • Insurance needs
  • Financial goals
  • Current investments



You should remember to ask for references from their colleagues such as insurance agents, attorney or accountants. Also, you should request for a contract showing the amount you are expected to pay as well as the services provided by the financial advisor.


Look out for their Credentials


It takes a lot of time and effort to get professional licenses despite the fact that it does not guarantee competence. However, you should always check look out for the basic professional designations and certifications when selecting a financial advisor. The most notable professional designations of a financial advisor include;

  • CIMA, Certified Investment Management Analyst
  • CFP, Certified Financial Planner
  • ChFC, Chartered Financial Consultant
  • CFA, Chartered Financial Analyst
  • CLU, Charted Life Underwriter
  • CPA, Certified Public Accountant


Ask about their Preferred form of Compensation


Forms of compensation vary from one professional to another, and that is why it is important to ask how they are compensated. The most notable forms of compensation include; payment on a commission basis, charging a fee for based on time spent with a client, or fee plus commission.  Also, it is advisable to build a relationship with your advisor for more positive engagements.

Will Your Spouse Receive Their Life Insurance Benefits?


Are you absolutely sure that, in the event of a sudden death, you will receive the benefits of your spouse’s life insurance?

When a policyholder with life insurance dies, there are many circumstances that can make their partner unable to collect the life insurance benefits. When a spouse applies to receive these benefits, there are a large variety of reasons as to why you could be denied, and unless you get lucky and raise enough attention to the issue that the company accedes, these benefits can be lost forever.

So how to avoid this situation and get your benefits with no hiccups or stress? The following are some useful tips for ensuring that your spouse gets life insurance benefits without any problems;


  1. Ask Questions


When you are not sure about something, it is always advisable to ask questions for clarity. On the other hand, policyholders are also expected to be honest when responding to questions or providing any information. Life insurance companies can deny you benefits based on incomplete or inaccurate information, turning you down for not reporting even minor ailments or medical conditions that could have nothing to do with your or your partner’s death.


  1. Ask for Temporary Cover During the Underwriting Process


Death can occur before the policy becomes operational and that is why there is a need for temporary cover. Otherwise, you cannot go to claim life insurance benefits before the underwriting process has been finalized. Arranging temporary cover during underwriting requires you to pay premiums, which will be refunded when the policy kicks in.


  1. Keep Notes


When having a conversation with representatives of a life insurance company, it is advisable to keep notes of everything you discuss, even the minor details that you wouldn’t think you need to keep track of. If nothing else, your notes should include dates and names of the life insurance agent serving you. Such information or documents come in handy as evidence in instances of denial. Your agent should provide you with a copy of all the interview statements during the application process.


  1. Read Guides before Purchasing a Policy


Bodies such as the National Association of Insurance Commissioners and the American Council of Life Insurers have some useful guides that one should look at before purchasing a life insurance policy.


  1. List a Secondary Address


Your policy should have a secondary address as this ensures that you receive reminders when you forget to your premiums. This typically happens when you change banks or move to a new neighborhood.

Kaine against Trump’s Attempts to make the Dismissal of Federal Employees Easier

Senator Tim Kaine has slammed Trump for his plan to empower federal agency heads through Congress to dismiss federal employees. According to Kane, president Trump was afraid of being forced to be accountable by federal employees that may just be doing their jobs.


While addressing federal workers during the annual legislative and grassroots mobilization conference organized by the American Federation of Government Employee’s (AFGE), Kane argued that Trump is a power hungry president that should not be given powers to fire federal employees at will.


On January 30, Trump called for the extension of firing powers to all federal agencies and praised the VA Accountability Act. The Act gives firing power to the head of the Department of Veterans Affairs to dismiss employees that are perceived to go against the set guidelines.


Trump claimed that federal employees that undermine public trust should be removed from federal service while good workers should be rewarded by the relevant Cabinet secretary. Currently, Cabinet Secretaries and federal agency heads do not have such powers, and Trump was calling on the Congress to empower them.


Kaine said that Trump’s remarks did not in any way surprise him and that the objective of Trump’s current campaign is to come up with a way of punishing political disloyalty in federal service. He claimed that the president has already sacked the deputy attorney general and an FBI Director for perceived political disloyalty.


According to Kaine, Trump has in the recent past threatened to stop a special investigation, and this is a clear sign of his intentions.  In fact, Kaine claims that he wants to force people to be loyal to him instead of being loyal to the constitution.


The Congress has already received a Republican proposal on the issue, but Kaine and a good number of other Senators are opposed to the new plan. In fact, the proposal can only pass the Senate with 60 votes, and Kaine is happy that this is an uphill task. Currently, Republicans have a slim majority of 51 members and any opposition from Democrats will make it difficult to pass the bill.


An attempt to extend the VA Accountability Act to other agencies is a continuation of Trump administration’s attack on Civil Service. Other attacks have been the two government shutdowns and the hiring freeze. J. David Cox, the current AFGE President, observes that there has been a rise in the leach class whose intention is to suck the life from federal service.


New Social Media Rules Forbid Federal Employees from Making Political Posts

Federal employees that want to keep their jobs have to stay away from making political posts while at work. According to the new guidelines under the Hatch Act, federal employees have to avoid making political statements on social media platforms while on the clock.


The Act has clear guidelines on what federal employees are not supposed to post on social media. There are certain types of political activities that have been prohibited under the Hatch Act, and this means that all federal government employees are always under close watch.


Who does the New Act apply to?


The new guidelines apply to employees in all federal agencies including heads of various federal agencies, members of federal agencies, ambassadors, National Park rangers, and NASA workers.  However, the new guidelines do not apply to the legislative branches of government, the president, and the vice president. Federal employees are expected to stay within the law in their political engagements on social media.


Shares, Likes, and Retweets are Illegal


It is important to point out that the law is not limited to posting. The law extends to liking, sharing, or retweeting your favorite political posts or pictures on Instagram, Facebook, and Twitter. Moreover, federal employees are forbidden from engaging in the mentioned social media activities in both private and professional lives.


However, the employees can donate to political causes and campaigns at a personal level but are not allowed to convince or implore other people to donate to political campaigns and causes. This applies when one is on the clock.


On the Clock vs.  Off


A federal employee’s public life should be separated from activities like supporting political parties and candidates. The Hatch Act Social Media Quick Guide stipulates all the instances when an employee is allowed to engage in political activities. According to the new guidelines, an employee that is away from work can post about their support for a particular party or candidate.


Also, they can even share with their friends or followers about their involvement in fundraising events for their favorite candidates or parties. However, the employees are prohibited from such activities while on the clock or at work. Law enforcement agencies and the intelligence department are completely forbidden from such activities while on or off the clock.


Warnings to Members of the Trump Administration


Members of Trump’s administrations like the United States ambassador to the United Nations and the White House Director of Social Media have in the recent past received warnings from the Office of Special Counsel for violating the new guidelines. Apart from warnings, other punishments that one can receive include; a civil penalty of less than $1000, letter of reprimand, suspension, debarment from federal service, or removal from federal service.

Retirement Crisis in America: How policymakers are Failing

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Some predictions by futurists might appear like pure science fiction, but it is interesting to know that some of them might turn into reality. For instance, the prediction that some people will live more than 130 years in the coming years seems a possibility with the recent advancements in nutrition, lifestyle, and medicine.


The math of retirement savings is bound to change with the current trends. In the recent years, most people have become aware of the looming retirement crisis as the writing is already on the wall. Examples of recent events that signify a looming crisis include; an ineffective self-funding retirement, social security becoming the primary source of retirement income, and the end of corporate pensions.


The current retirement savings statistics are alarming and there is a need for policymakers to do something. For instance, the average retirement savings for 50 % of Baby Boomers and Gen Xers stand at $100,000 and $10,000 respectively.


Such figures would guarantee one a comfortable retirement in previous years, but that is no longer the case. As a result, millennials are bound to face a retirement crisis due to the ever-increasing financial pressures, which means that millions of Americans will end up living a retirement life full of financial challenges and yet they worked very hard for many years.


The future federal deficit is more likely to increase with the constant calls for the “safety net” to be expanded. As a result, the country is more likely to face an economic catastrophe, and that is why there are calls for policy changes. There is a need for policymakers and the insurance industry to come together and design policies that will save this country from the impending financial tragedy.


Techniques such as risk pooling can be adopted by insurance companies to minimize the risks that millions of Americans are likely to face when they retire. It is essential to have a reliable and protected retirement income for both derail and public sector employees, and this takes a collective effort self-regulatory, federal, and state policymakers to come up with the right policies for retirement benefits.


The current disclosure requirements and standards of conduct are inconsistent, complex, and multiple. As a result, there is a lot of confusion and increased costs due to limited access to advice. Therefore, the current regulatory thicket needs to be addressed to improve financial education and provide financial empowerment for consumers.

Federal Benefits Cuts: How they could affect you

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Proposed Federal benefits cuts: Who will they affect?

Recently, the White House announced several proposals that would reduce or eliminate some benefits for Federal employees. Some concern is valid– but at the same time, it is not yet the time for Federal employees to take action. Since the proposals are still fledging, any actual changes enacted would look very different as the two parties of the House try to change the bill to reflect their priorities and budgetary principles. Also, these changes may never actually happen! These proposals often show up, get batted back and forth between the houses, and never actually gain traction. However, it is still important to educate oneself on the potential changes and, while it is not yet time to prepare for the changes, have an understanding of the potential changes that are coming.

    What changes are coming?

One part of the proposals suggests eliminating Cost of Living Adjustments for retirees covered under the Federal Employees Retirement System, which would make it much harder for retirees to save the proper amount of money as they approach retirement, swimming upstream against the force of inflation as they approach retirement.

The FERS Special Retirement Supplement would also be removed for employees who retire before the age that they would be eligible for Social Security. Annuities would also be calculated based on the highest five years of pay while employed, as opposed to the former three.

What can federal employees do?

While there is no reason to lose sleep over these changes as of yet, there are a few things that federal employees can do, just in general: firstly, joining an advocacy group for federal employees, and secondly, to find the parts of your retirement you can control and take action. Cutting expenses in retirement budgeting, effectively utilizing your TSP, and opening an IRA are all excellent strategies to make sure that you are covered for the future in ways less affected by these proposals.

Altogether, this can be a time of concern for federal employees. The uncertainty, confusion and lack of stability can be distressing, but there is not, as of yet, any reason to worry. If these proposals take effect, there will be ample warning to change your current retirement plans. If you need to consult with experts on financial retirement, you can get a free consultation with Bedrock Financial Advisors ( and start planning a better retirement today.


Federal Employee Sick Leave

Federal Employee Sick Leave

As of January 8th, 2018, if you had more annual leave hours than you were legally allowed to have, then those extra hours suddenly disappeared. Usually, 240 annual leave hours is the most you can have. Fortunately, the sick leave hours were left untouched.

All federal workers who are full-time will receive the same hours of sick leave, which is 104 hours annually or 4 hours bimonthly. Federal workers who are part-time earn less sick leave hours. There is no limit to the sick leave hours you can build up and use for personal situations in your life. This could be when you get sick, have an appointment with the doctor, or have general family care that you must attend to. If your sick time is for one or more of these purposes, the agency you work for can give you as many as 30 days to deal with these matters.

All sick leave requests need to get approved first. That is why they need to be scheduled ahead of time. Only serious situations like pregnancy, a medical operation, or childbirth would be valid excuses for this and can be planned ahead of time.

Of course, if you suddenly become sick with the flu and need to take one or two days off, you can still get sick leave and have it approved afterward. But, if you’re taking more than 3 days off because of your sickness, then you need to give your supervisor a note from your doctor which acknowledges your illness. There is generally a lot of flexibility with sick leave, but it is not meant to be misused or abused for non-health purposes. If you’re caught doing this, you could be fired or face other disciplinary action.

Many employees accumulate lots of sick leave hours. In fact, some 30-year employees will have more than 3,000 hours saved. This can be really beneficial to them in their retirement years because those sick leave hours will increase their annuity as they are added onto their years of active service.

For example, A CSRS employee that saves up 12 months of sick leave and then retires will see a 2% increase in their annuity. Each of these months is equal to around 0.1667%. If this were a FERS employee, the annuity would increase annually by 1%. Each of these months would be a 0.8333% increase. If you retire at 62 years old, there would be a 1.1% yearly increase in the annuity if you worked for 20 years.

U.S. Postal Service Lets Some Workers Retire Early

U.S. Postal Service Lets Some Workers Retire Early

The U.S. Postal Service is handing out some early retirement packages to roughly 26,000 of their workers, although there were no buyout offers here. Depending on their phase, these workers must agree to leave by March.

Eligible employees must think very carefully about taking an early retirement package like this. Postal unions argue that postal workers didn’t have enough time to think about this because the early retirement deal was announced without any advanced notice.

Within the last 10 years, the Post Office has suffered financial problems which have caused them to reduce the number of positions in their organization. Not only that, they’ve been offering early retirement packages to existing workers so they can reduce their employee numbers and not hire anyone new. Right now, there are only about 500,000 postal workers who are actual career employees of the organization. This is over 100,000 less than it used to be for this number. The Postal Office had given buyouts before, but they were under the maximum of $25,000.

The early retirement authority states that workers may choose to retire and get benefits right away if they’ve worked for a minimum of 20 years in the organization and are at least 50 years of age. Either that or they could have served for 25 years in their position and be any age. Anyone under 55 and under CSRS that retires could see their annuity reduced.

The federal budget does not factor into the Post Office’s operations. So, this early retirement offering doesn’t mean that other agencies are going to offer the same thing. Pressures from the budget made early retirement and buyout offers something to be expected in 2017. However, there were only a handful of agencies which actually offered them to their employees.

Social Security Administration Underfunded by Congress

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Social Security Administration Underfunded by Congress

The Social Security Administration is there for Americans when they are at their most vulnerable. When Americans are going through retirement, the death of a loved one, or are faced with a life-changing disability, they should not have to struggle to secure benefits.

Americans paid for these benefits while they were working via their Social Security payroll taxes. However, due to the severe budget cuts, the Social Security Administration’s (SSA) operating funds decreased by 11% since 2010 (adjusted for inflation). The SSA has also closed over 60 field offices and 500 mobile offices because of budget cuts. Around 16,000 claimants waited over an hour for in-person services in August of 2017. SSA has cut back on the number of Social Security Statements mailed out to both current and future beneficiaries. In 2010 the number was 153 million. By 2017, this number was down to just 10 million. Now only workers above the age of 60 who do not have an online My Social Security account will receive mailed statements.

Because of these cuts, far too many applicants have to go through long hold times or busy signals. In 2010 the wait time was just three minutes. Now, the average wait time is 18 minutes.

There are also long waits for disability hearings. The average wait time for a disability insurance hearing in August 2017 was 627 days. These waits are so long that thousands of disabled Americans die each year while they wait. It was reported that 10,000 disabled Americans died while they waited for their hearing in fiscal 2017. At the same time, each day around 10,000 Baby Boomers become eligible for Social Security retirement benefits.

Senator Bernie Sanders (I-Vt.) believes that Congress is “making a very bad situation even worse,” by considering budget cuts to the SSA. He does not consider these measures to be cost saving, but rather a step that could destroy Social Security.

All of these statistics and realities should send a message to Congress. It is undeniable that the budget cuts to the SSA put children, families, and disabled Americans that rely on Social Security at risk. To make matters worse, the 2018 budget proposal from President Trump decreases the SSA’s funding even more. The Senate Appropriations Committee proposed a severe reduction of around $460 million which is almost 4% of the SSA’s operating budget. Also, the House-approved 2018 fiscal appropriations legislation would keep underfunding the agency, therefore freezing the SSA’s operating budget for another year.

Interestingly, the Social Security Administration is one of the most efficient federal agencies. The agency’s total administrative expenses are less than 1% of the total benefits program. The agency is funded by workers’ payroll contributions rather than from general revenue. This makes it extremely unfair to cut SSA’s funding to help offset other federal expenditures.

With all of that in mind, why are they still cutting the agency’s budget? Some believe they are doing this in order to dismantle Social Security. They may be hoping to destroy the public’s confidence in the SSA. If enough people are frustrated by poor service, they may turn against Social Security itself. If that happens, it would be easy to cut the benefits entirely in the future.

It is time for Congress to step up and adequately fund SSA. It is necessary for them to perform vital tasks without delays for the public. Rather than decreasing their funding, the SSA’s operating budget should be increased so the agency can do its job for the American people.